Memo shows Rutgers president sought to limit fallout from potential conflicts of interest

Rutgers University President Robert Barchi sent members of his senior staff a memo this month, nearly a year into his tenure, instructing them to keep him out of the university’s business dealings with two corporations that pay him hundreds of thousands of dollars to sit on their advisory boards.

The July 9 memo, released by the university on Friday, was sent to about a dozen top administrators on the same day that Rutgers released documents to The Record showing it had paid the companies millions of dollars since 2008. Its timing suggests that Barchi and other university officials recognized the potential for the appearance of a conflict of interest even before a debate over the arrangement went public, and took steps to get ahead of the controversy.

Several state lawmakers have since said they believe Barchi should step down from the corporate boards, which paid him more than $300,000 in fees and stock awards last year, pushing his annual compensation to more than $1 million. But Barchi has pushed back. And Governor Christie said this week that he sees nothing wrong, as long as Barchi recuses himself from decisions involving VWR International and Covance Inc., which sell lab supplies and drug development services.

A university spokesman said Friday that, although it was not put in writing, Barchi told staff members after he became president that he should be kept out of decisions involving the two companies.

“Nevertheless, in light of recent concerns, President Barchi felt he should take a ‘belt-and-suspenders’ approach in this matter by reiterating and memorializing his instructions to ensure he had no involvement in matters concerning VWR and Covance,” Miranda said in a statement.

In the memo, Barchi writes that he does not use university time or resources to serve either company, but adds: “Because I may be seen to have a conflict of interest in matters related to the University and Covance Inc. and/or VWR International LLC, I am delegating all responsibility and authority for handling any such matters to you. Please ensure that I am screened from any information or communications on such matters.”

John J. Farmer Jr., university counsel, said in an interview on Friday that the so-called recusal memo Barchi wrote was in response to The Record’s request for information under the state’s Open Public Records Act.

“There is a potential for the appearance of a conflict and that’s why we’ve taken the measures that we have,” Farmer said.

He said the memo is not required under current university policy. But that could change. A review of compliance measures involving university policies is under way and such recusal letters could become standard practice by October, Farmer said.

Farmer said Barchi has also agreed to recuse himself from personnel decisions involving his wife, Francis Barchi, a social work professor at Rutgers.

Rutgers business relationships with VWR and Covance predate Barchi’s arrival. And he has been on the boards for more than seven years. But some ethics experts were critical of the arrangement because the firms do business with the school and could stand to do more as Rutgers merges with most of the state’s medical schools. Barchi’s outside positions are also lucrative additions to his potential $750,000 in earnings at Rutgers, at a time when the school is raising tuition and facing a complicated transition.

But Barchi disclosed his side jobs to the university’s board of governors before he was hired and got its approval, officials have said. He also acknowledged his role on the boards on financial disclosure forms that he filed with the state and are available to the public.

University officials also released Barchi’s April 2012 letter of appointment on Friday that says the university recognizes it “is both appropriate and beneficial” for Barchi to serve on “outside boards, and in positions of responsibility in national and international associations related to education.”It adds that Barchi must get approval from the chairman of the board of governors first, though.